However, I believe that purchasing mutuals is a better to diversify without a lot of money. An investor can own whole indexes through mutual funds. Also there is no need to worry if an individual stock drops because the mutual fund probably owns hundreds of different stocks.

Although this is the Stock market Club there are many other investment vechiles. Savings Bonds are a good way if you don't have a lot of capital to start investing. Money Market funds and CDs also provide a good way to short term invest